A judge, like the Fed Reserve chief, should care about income inequality

By Vince Chhabria

Updated
6:18 pm PDT, Saturday, November 1, 2014

Federal Reserve Chairwoman Janet Yellen recently gave a speech on income inequality, a topic her predecessor said was not within his purview.<252><137>a meeting of the Board of Governors of the Federal Reserve System at the Federal Reserve in Washington. Wednesday, Oct. 22, 2014. The meeting was to discuss a final rulemaking requiring sponsors of securitization transactions to retain risk in those transactions. (AP Photo/Susan Walsh)<252><137> less

Federal Reserve Chairwoman Janet Yellen recently gave a speech on income inequality, a topic her predecessor said was not within his purview.<252><137>a meeting of the Board of Governors of the Federal Reserve System at ... more

Photo: Susan Walsh / Associated Press

Photo: Susan Walsh / Associated Press

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Federal Reserve Chairwoman Janet Yellen recently gave a speech on income inequality, a topic her predecessor said was not within his purview.<252><137>a meeting of the Board of Governors of the Federal Reserve System at the Federal Reserve in Washington. Wednesday, Oct. 22, 2014. The meeting was to discuss a final rulemaking requiring sponsors of securitization transactions to retain risk in those transactions. (AP Photo/Susan Walsh)<252><137> less

Federal Reserve Chairwoman Janet Yellen recently gave a speech on income inequality, a topic her predecessor said was not within his purview.<252><137>a meeting of the Board of Governors of the Federal Reserve System at ... more

Photo: Susan Walsh / Associated Press

A judge, like the Fed Reserve chief, should care about income inequality

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Federal Reserve Chair Janet Yellen has a job where her every pronouncement is studied and dissected by people around the world. Last month, she gave a speech in Boston about income inequality. “The extent and continuing increase in inequality in the United States,” she said, “greatly concerns me. I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity.”

On the surface, it does not seem remarkable for a Fed chair to give such a speech. But compare Yellen’s statement with one made by her predecessor, Ben Bernanke. He essentially declined to comment on the topic, claiming in a 2007 speech it “inherently depends on values and social trade-offs and is thus properly left to the political process.”

The contrast between these two statements jumped out at me, because I am a federal judge. Bernanke’s admonition that a Fed chair shouldn’t be involved in discussions about pressing issues of the day, like income inequality, is the kind of admonition often directed at judges. But after my first six months on the federal bench, it is not obvious to me that a judge should avoid discussing income inequality any more than should a Federal Reserve chair.

Yellen entered the dialogue because she has something to bring to the table. Federal judges also have a unique perspective on inequality. Every day in our courtrooms, we see its effect. We see it on a micro level, as when people of limited means represent themselves because they cannot afford a lawyer. And we see it on a macro level, as when we are asked to apply (or strike down) laws designed to protect the vulnerable.

But beyond our ability to contribute to this discussion outside the courtroom, focusing on the issue of economic disadvantage might help us do our jobs better inside the courtroom.

In his confirmation hearing, Chief Justice John Roberts said that judges should simply call balls and strikes without regard to a litigant’s lot in life. It’s a common notion — judges, like umpires, should be objective.

But contrary to conventional wisdom, studies show that when the typical umpire calls balls and strikes, he is in fact influenced by a player’s status. If a pitcher is a dominant one (say, the Giants’ Madison Bumgarner), then the ump is more likely to call his pitch a strike even if it’s just off the corner of the plate. If a pitcher is struggling, the ump will tend to do the opposite, “squeezing the strike zone” by calling a ball even if the pitch paints the corner.

To be sure, the umpire doesn’t do this on purpose. But by failing to consider the context — namely, the people involved and their relative status — the ump is unwittingly allowing that context to influence his decision. My sense is that the same risk is present for judges. And to guard against this risk, perhaps judges should consider economic inequality rather than attempting to ignore it.

For example, take a case from my previous job as a lawyer in the San Francisco city attorney’s office. In 2011, we launched an investigation of the car- wash industry for possible violations of San Francisco’s minimum wage laws. Our probe led us to one car wash in particular, and it quickly became clear that this business was indeed denying its workers their right to the minimum wage. The company required its workers to arrive at a specified time, telling them they would be fired if they failed to show up as scheduled. But instead of allowing the workers to clock in and begin working upon arrival, the company required the workers to wait in a room until a supervisor decided there was enough business to allow the workers to go on the clock. And sometimes, if business was slow, workers were sent home without ever being allowed to clock in.

Under the law, the workers clearly should have been paid for the time spent waiting, but the workers either did not know their rights or were too afraid to assert them. These were people with limited education and limited language skills who typically worked 80-plus hours a week in multiple low-wage jobs to put a roof over their children’s heads. Our office sued on the workers’ behalf to vindicate their rights.

We knew we had a strong case, but we were worried about what might happen in court. The workers never kept records of how long the car wash typically made them wait in the room unpaid. Even after we spoke with the workers, they were not nearly as good at keeping records as I might have been. Would the judge understand, given their situation, that it was unrealistic to expect them to know their rights or keep records in the same way a person of education and means might do? How would this affect our ability to prove our case?

Also, when the car wash gave the workers their biweekly paychecks, it required them to sign a form attesting that the checks reflected the actual amount of time worked. Would that be held against them, or would the judge recognize that the workers may not have understood their rights, or that any worker who refused to sign the form could lose his or her job, which could make the difference between mere poverty and actual homelessness?

Overall, would the judge approach the case by taking into account the issue of inequality or by trying to ignore it, thereby running the risk of unwittingly favoring the side with greater stature?

We never learned the answers to these questions, because we reached a fair settlement with the car wash. In addition to paying the workers for time previously uncompensated, the company agreed to reforms to ensure its employees received full pay going forward.

But now that I’m a judge, I keep thinking about this case because similar questions keep coming up. It seems to me that, to do my job right, I should be mindful of economic inequality when making decisions about people’s rights. After all, these decisions are far more consequential than a pitcher’s throw, even if that pitcher happens to be Madison Bumgarner.